I have tried both ways, in fact I was using version 2 as my standard until I took a closer look just before Christmas.
Version 1 divides the circle into quarters; version 2 divides it into eighths, where one signal guards the entrance to the quarter, and the next guards the exit from the quarter.
Version 2 lets trains enter the circle slightly sooner, as they don't have to wait for the previous train to exit the circle, just exit the entrance to the quarter. So yes higher throughput - noticeable, not so sure.

Reasons why I stopped using version 2:
1. More signals means more times the trains potentially stop and recalculate the path - I have watched a train go completely around the circle before taking an exit, which kills any throughput gain really fast.
2. Why guard an exit from a segment? There is no possibility of a collision, because there is only ever one train in a segment. Guarding the exit adds complexity without adding any protection.
3. Splitting the circle into eighths means that a train, even a one locomotive - one cargo train, doesn't fit into a segment, it is always blocking two segments (one entrance to a quarter and one exit). Again extra complexity without corresponding benefit to justify it (as far as I can tell).
4. Twice, in about 250 hours of play, in a high traffic area (15+ trains using one intersection), I managed to deadlock trains in the circle - 4 trains using the circle, and none of them able to exit. I still don't understand why, changing one train to manual and driving it out of the circle cleared the problem - I didn't have to move any other trains out of the way.

4. Twice, in about 250 hours of play, in a high traffic area (15+ trains using one intersection), I managed to deadlock trains in the circle - 4 trains using the circle, and none of them able to exit. I still don't understand why, changing one train to manual and driving it out of the circle cleared the problem - I didn't have to move any other trains out of the way.

I've never had a deadlock in a circle intersection I couldn't explain for some other reason (like a train running out of fuel or a mistake in the signaling), but I've occasionally read circle intersections are supposedly "not efficient" and I was watching a section of busy track and suddenly wondered if this would change anything. And couldn't convince myself either way.

A related question -- when used for only three directions of traffic does a circle intersection work better or worse or the same as something like this:

3 way.jpg (497.25 KiB) Viewed 930 times

Once again I am unable to convince myself either is noticeably different in throughput capacity.

All the cross or merge points are separate blocks, isn't that what you want?

You only need chain signals when a train passing that signal and stopping on the next one would block A DIFFERENT PATH than the path passing this signal, so no chain signals for merging: "T" for normal train signal.

Okay, I just want to make sure I understand this. If you make the signal changes indicated by Loewchen, that makes the T slightly faster why? Fewer recalculations due to fewer chain signals?

It's about throughput of the junction not game performance, chain signals force a larger gap between trains, if you use them in places where they are not needed the only effect is that trains wait unnecessarily.

Actually, thinking about it some more, based on what you said... shouldn't the signals next to the green Ts I've inserted also be changed to regular instead of chain signals?

"no chain signals for merging" ... So, basically -- the only time you want a chain signal is when you are crossing another rail. Not prior to a fork and not prior to a merge. Right? Wow, if that's right, I just changed my basic understanding of rail signals after playing this game for over 1500 hours.

Version 2 lets trains enter the circle slightly sooner, as they don't have to wait for the previous train to exit the circle, just exit the entrance to the quarter. So yes higher throughput - noticeable, not so sure.

No, it actually won't help throughput, because while the train can enter when it clears that block, it won't until the block it needs to exit from is clear - and the endings of those blocks are at the same place in both circles.

There are 10 types of people: those who get this joke and those who don't.

Actually, thinking about it some more, based on what you said... shouldn't the signals next to the green Ts I've inserted also be changed to regular instead of chain signals?

Exactly right, but only if you have very short trains with one or no wagons, otherwise trains would be able to enter the junction and stop at the normal signals after the green Ts which are so close that the rear would block the yellow block in the middle.

"no chain signals for merging" ... So, basically -- the only time you want a chain signal is when you are crossing another rail. Not prior to a fork and not prior to a merge. Right? Wow, if that's right, I just changed my basic understanding of rail signals after playing this game for over 1500 hours.

Yes. Chain signals are historically misused, when they were first introduced deadlocks were the big sickness of the time and people knew chain signals could prevent them, just not how exactly, so they replaced all junction signals with them and since this worked to prevent deadlocks they kept doing it. Somewhat like antibiotics use in the 60s.